European equities were largely in positive territory on Thursday despite negotiations between the UK and EU over Brexit intensifying.
The pound fell steeply against the euro and the dollar on Thursday after European Commission president Ursula von der Leyen said Europe would begin legal action against the UK over its threat to break part of the Brexit Withdrawal Agreement. According to the EY Brexit tracker, more than 7,500 finance jobs have already left Britain for Europe.
COVID-19 concerns are also still very much in focus. At a Number 10 briefing on Wednesday, the UK’s chief scientific officer said “there's no cause for complacency” given that hospitalisations and death rates are continuing to rise. The number of cases registered on Wednesday were the highest level reached thus far in the pandemic.
Spain has also become the most recent European country to order restrictions on movements and social gatherings, with the country’s health minister saying that the majority of the nation’s 17 regions have agreed to new rules to limit public services. Retail capacity will be decreased to 50% and a 10pm closing hour will be put in place for shops, bars, and restaurants.
There are some positive signs on the vaccine front, with the University of Oxford and AstraZeneca’s vaccine being slated for an accelerated review by European regulators.
A two day EU Special European Council summit begins on Thursday with German chancellor Angela Merkel expected to be a key player as she attempts to bridge the divide between members over the bloc's €1.8tn (£1.6tn, $2.1tn) recovery package.
Also, the IHS Markit’s UK manufacturing Purchasing Managers Index (PMI) showed steady growth in output and new orders in September, although job losses continued for the eighth month in a row.
Watch: What is a No-Deal Brexit?
Global equity markets have been extending gains on Thursday following renewed hopes for fresh US stimulus measures, though concerns ahead of the America’s presidential election continue to loom large.
Among key pieces of data on Thursday are the US weekly initial jobless claims as well as US data on personal income, personal spending and construction spending for August. Markets will also be watching for statements from the Fed’s Williams and Bowman.
Stock trading in Asia faced a major outage after Japan’s Tokyo exchange halted trading for the entire day. There is no word yet on when trading will resume.
Meanwhile markets in China, Hong Kong and South Korea are closed for a holiday. Chinese markets will remain closed for a week.
At market close, Japan’s Nikkei (^N225) was flat, Hong Kong’s Hang Seng (^HSI) was up 0.8%, China’s Shanghai Composite (000001.SS) tilted down 0.2%. The KOSPI (^KOSPI) in South Korea was also up 0.9%.